The Index of Education and Occupation (IEO) is designed to reflect the educational and occupational level of communities. The education variables in this index show either the level of qualification achieved or whether further education is being undertaken. The occupation variables classify the workforce into the major groups and skill levels of the Australian and New Zealand Standard Classification of Occupations (ANZSCO) and the unemployed. This index does not include any income variables.

Interpretation of Index Scores (IEO)

A low score indicates relatively lower education and occupation status of people in the area in general. For example, an area could have a low score if there are:
- many people without qualifications, or many people in low skilled occupations or many people unemployed
AND
- few people with a high level of qualifications or in highly skilled occupations

A high score indicates relatively higher education and occupation status of people in the area in general. For example, an area could have a high score if there are:
- many people with higher education qualifications or many people in highly skilled occupations
AND
- few people without qualifications or few people in low skilled occupations

This index is preferred in situations where the user:- is interested in only education and occupation variables
- is interested in an index that does not include income.

An example would be where a user: - is analysing income effects.

We do not recommend using this index if the user:
- is only interested in disadvantage (not advantage)
- is interested in a more general measure of advantage and disadvantage, such as the IRSAD
- is analysing information that has already been included in the index, such as unemployment.

The variables that are included in the index can be found below. Each variable has a loading that indicates the correlation of that variable with the index. A positive loading indicates an advantaging variable where as a negative loading indicates a disadvantaging variable.

FINAL VARIABLE LIST

Variable

Description

Loading

OCC_SKILL1

% of employed people who work in a skill Level 1 (highest) occupation

0.89

DIPLOMA

% of people aged 15 years and over whose highest level of educational attainment is a diploma qualification

0.68

ATUNI

% of people aged 15 years and over at university or other tertiary institution

0.57

OCC_SKILL2

% of employed people who work in a skill Level 2 occupation

0.34

UNEMPLOYED

% of people (in the labour force) unemployed

-0.49

CERTIFICATE

% of people aged 15 years and over whose highest level of educational attainment is a certificate III or IV

-0.54

OCC_SKILL4

% of employed people who work in a skill Level 4 occupation

-0.74

OCC_SKILL5

% of employed people who work in a skill Level 5 (lowest) occupation

-0.80

NOYEAR12ORHIGHER

% of people aged 15 years and over whose highest level of education is Year 11 or lower

-0.88

Note - The loadings are closely related to the variable weights used in the construction of the index. For details, please refer to Chapter 4.1 in the Technical Paper.

The table below shows variables that were initially considered for the index, but were subsequently dropped (excluded) due to low loadings (not adding enough value to the final index). For more information, please refer to Chapter 4.3 in the Technical Paper.

EXCLUDED VARIABLES

Variable

Description

ATSCHOOL

% of people aged 15 years and over who are still attending secondary school